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The Chancery Division’s unexpected decision in Shah v Insafe International Ltd.
KEY POINTS
- Insafe International made a contract settlement with HMRC.
- The company deducted the liability from the beneficiaries’ payments.
- The judge appears to misunderstand the nature of the liability agreed with HMRC.
- As a result of the decision the employer suffered no consequences for trying to avoid tax.
It is hard in some cases to discern how the judge reached the decision on the basis of tax law. A recent example is Arvind Shah v Insafe International Ltd [2016] EWHC 1036 (Ch) which appears to have been decided on the basis of a misunderstanding of tax law and procedures. Although it is not a tax case – it is a trust one – the result depends largely on tax law.
Insafe International set up an employee benefit trust (EBT) in 2006 into...
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